In the world of economics, where local and global policies intertwine with decisions that could impact the lives of millions, Jerome Powell, Chairman of the Federal Reserve, stands at a crucial crossroads. While facing unprecedented challenges amid global market fluctuations and controversial political statements.
Powell seeks to maintain the monetary independence that defines the Federal Reserve, while avoiding falling into the trap of political conflicts, especially with the newly elected President Donald Trump. With preparations for 2025, it seems the Federal Reserve is on the threshold of a new phase filled with economic challenges, inflation, and decisive decisions that could reshape U.S. financial policy for decades to come.
The situation now is more complicated than during Trump’s first term when trade wars led to interest rate cuts at a time when inflation was low. Now, inflation is higher, and Powell wants the Federal Reserve to be prepared to assess the impact of Trump’s policies once they become clearer. Experts believe that the Federal Reserve will be more cautious about lowering interest rates in 2025 due to concerns about inflation.
The Chief Economist at JPMorgan noted that the Federal Reserve’s approach is now different, as inflation is above the target, unlike previous years when it was below the target. For this reason, the Federal Reserve is taking greater caution in making decisions regarding future changes in monetary policy.
